Fresh Ideas for Retiring Rich
These seven bold strategies can help you supercharge your savings and realize your dreams.
By Mary Beth Franklin, Senior Editor
From Kiplinger's Personal Finance magazine, October 2005
Advertisement
Launch a second career
4. Six years ago, David Marshall was CEO of a publicly traded real estate investment trust in Boston. When the company was sold to private investors, he walked away with a substantial lump sum. But with no job and no urge to retire, David sought guidance on what to do next -- something that would allow him to work fewer hours and give back to his community. He signed up with New Directions, an outplacement firm that caters to executives. New Directions helps clients clarify their goals, assess their strengths and develop a plan for the next chapter of their lives.
"I thought I wanted to teach at the college level, but I wasn't willing to go to school for a PhD," says David, 57. "And I considered working for a nonprofit, but I'm not comfortable asking for money. So I decided to buy a small business that could create and retain jobs for my employees and provide them with health insurance. I thought that would be a worthy thing to do."
Using part of his buy-out settlement, he purchased three independent hardware stores in downtown Boston, which he describes as "the 7-Elevens of hardware stores" compared with such big-box giants as Home Depot. He hired managers and staff to run the day-to-day operations, but pays all the bills himself. His bookkeeping chores keep him busy ten to 15 hours per week.
The stores are profitable and generate about $200,000 in income per year for David, representing a 20% return on his investment. "I make about half as much money as I used to, but I have a lot more time to enjoy what I have," he says, including a vacation home on nearby Cape Cod, where he and his wife, Tricia, like to garden and sail. In the winter, they use their condo in Maine for ski vacations.
David is in good company. An AARP survey found that eight out of ten baby-boomers expect to work beyond normal retirement age, at least part-time. Some expect to need the money; others will do it to remain active. Many hope to launch new careers.
David says owning his own business offers several advantages. It provides health insurance for him and his employees. It creates a steady income, which is important because he will have no pension to rely on. And it allows him and Tricia to leave a cash-generating asset to their two grown daughters.